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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. Why Investors Care
| Released on 11/29/06 For Oct 2006 | ||||||||||||
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Highlights
The new home market has been rattled by the housing slowdown. Unlike existing home sales, October sales of new homes proved weaker than expected, down 3.2 percent to a 1.004 million unit rate. The data included sizable downward revisions to both September and August.
But like existing homes, supply of new homes continues to rise, at 7.0 months in October vs. 6.7 months in September. Despite the rise in supply, the median price, at $248,500, surged 13.9 percent in the month from a two-year low for a year-on-year rise of 1.9 percent. Price data are often erratic month to month, but the gain may ease concern of home-price erosion. Yesterday's existing home sales data showed the median price unchanged at $221,000.
Regionally, the Northeast posted a big 39 percent decline -- hitting a 24-year low despite favorable weather! The Midwest showed a small decline with the South and West little changed.
Today's report interrupts a favorable run of data from the housing market. Worries that the housing slowdown may be too severe have quieted in recent weeks, but today's data may reawaken new concern. Treasuries firmed and the dollar eased in reaction to the data.
New home sales in September jumped 5.3 percent to a 1.075 million annual rate. This helped to partially bring supplies back in line as supply declined to 6.4 months from 6.8 months in August. In addition to the supply numbers, markets will be noting how weak prices may be since home prices are likely affecting consumer spending through effects on home equity lines of credit. The median price fell 9.3 percent from August to $217,000 in September-the lowest median price in two years.
New home sales Consensus Forecast for October 06: 1.040 million-unit rate
Range: 0.990 million to 1.085 million-unit rate
![[Chart]](chart.gif)
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There is no question that lower interest rates boost home sales. Other factors also impact housing decisisions, such as employment and income growth, and wealth stemming from stock market gains. |
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